Daily Mail operating profit drops but results top expectations

Daily Mail & General Trust reported a drop in pre-tax profit and operating profit for the year to the end of September, amid challenging market conditions for print advertising revenues, but the results were ahead of expectations.

Adjusted pre-tax profit fell to £260m from £281m, while adjusted operating profit declined to £277m from £288m. Still, this was ahead of expectations, with broker Numis having pencilled in pre-tax profit of £249.8m.

Statutory pre-tax profit rose to £247m from £216m.

DMGT said the drop in operating profit was mostly due to dmg media, which increased digital investment and suffered an underlying 12% decline in print advertising revenues, and to Euromoney, which saw revenues fall by an underlying 4%.

The company said the decline in pre-tax profit also reflects a £10m drop in income from joint ventures and associates, including a £17m reduction in respect of Local World, following the disposal of its stake in November 2015.

Meanwhile, revenue came in at £1.92bn from £1.85bn the year before and ahead of consensus expectations of £1.88bn.

Daily Mail upped its full-year dividend by 3% to 22.0p, in line with its dividend policy of delivering real dividend growth.

Chief executive Paul Zwillenberg said: “DMGT's results reflect the ongoing resilience of the portfolio through varying market conditions. Revenues were supported by good organic growth in many of our B2B and consumer digital operations. This was balanced by challenging market conditions for print advertising, property information, energy and financial sectors.

“Our focus has been on prudent financial and strategic management of DMGT's diversified portfolio. We have continued to invest in long-term growth opportunities across a variety of organic initiatives whilst making small bolt-on acquisitions, maintaining a strong balance sheet and continuing to deliver real dividend growth for our shareholders.”

At 0814 GMT, the shares were up 6.6% to 813.50p.